Quinn to hire firm to clamp down on Medicaid abuse

(Crain's) — The Quinn administration is gearing up to hire a company to check the eligibility of Medicaid patients, a key part of a plan to cut $1.6 billion a year from the health insurance program for the poor.

Cutting patients who don't qualify for the cash-strapped program is expected to yield estimated annual savings that have mushroomed in recent weeks from $120 million a year to a wild-eyed $350 million.

Even the lower number is unrealistic, some advocates for Medicaid patients say.

“None of these things are going to get them to sustainable savings until they deal with the real cost drivers in health care: long-term care services and support . . . but that's hard because it means saying no to unions and facilities,” said Barbara Otto, CEO of Chicago-based Health and Disability Advocates.

The Illinois Department of Central Management Services last week issued a notice that intends to solicit bids for “enhanced eligibility verification” for the program's 2.7 million patients.

CMS, the state's purchasing agent, and the Illinois Department of Healthcare and Family Services, which runs the Medicaid program, plan to move quickly.

A bid request is scheduled to be issued by July 13, with a winning bidder selected about a month later, the notice said.

While the terms of the contract are still being determined, the two-year agreement would include two one-year renewal periods, the notice said.

The Save Medicaid Access and Resources Together Act, which Gov. Pat Quinn signed into law last week, not only cuts back on services but calls for cutting people who are ineligible for the program. For example, a family of four must now earn less than $30,666 a year to qualify for the state's FamilyCare program.

In April, the Quinn administration estimated that $120 million a year could be saved by checking eligibility more closely, but during the last few weeks of the legislative session, the estimate was jacked up to $350 million a year, a HFS spokesman said in a statement.

The top end of that range “is likely an optimistic number,” the HFS spokesman acknowledged. But he said the state can still achieve important savings by tightening the application process.

“In order to reduce unnecessary costs in health care delivery, all hospitals, regardless of location or patient population, need to improve their practices that result in potentially preventable re-admissions,” he said.

In an April summary of proposed cuts, the Quinn administration suggested that the state should require Medicaid patients to confirm their eligibility annually and that a bigger effort should be made to remove from the program out-of-state residents and teenagers who have outgrown the AllKids program for patients under age 19.